The Financial Conduct Authority (FCA), the UK’s financial sector regulator has published its final guidance on the fair treatment of vulnerable customers.
The guidance, which aims to ensure that all customers are treated fairly, provides regulated firms with a definition of vulnerable customers and sets out a series of requirements for firms to follow.
Identifying vulnerable customers
The FCA defines a vulnerable customer as “someone who, due to their personal circumstances, is especially susceptible to harm – particularly when a firm is not acting with appropriate levels of care.”
Announcing the publication of the guidance via Twitter, the regulator has highlighted that any person can find themselves in what can be considered ‘vulnerable circumstances’ at any time. As a result, this new guidance should be heeded by any firm serving most types of retail customer.
The guidance at a glance
The guidance, which has been the subject of various rounds of consultation requires regulated firms to strive to treat all of their customers fairly, regardless of their level of vulnerability.
The FCA says that in order to ensure that firms act in their customers’ best interests they must understand the needs of customers, ensure staff have the correct training and knowledge, create products and services that reflect customers needs and monitor effectiveness on a continued basis.
Use judgement
The guidance stops short of setting hard and fast rules for firms to follow, instead inviting firms to use their judgement to consider what is necessary to treat their customers fairly.
The guidance is sure to require response from across regulated firms from marketing to customer service and leadership.
Analysis: a new consideration for marketers?
Marketers have oversight of a firm’s communications, products, services and pricing; all combined, marketers provide the interface between a firm and its customers.
It’s in this context that the FCA’s latest guidance on protecting vulnerable customers should be understood by marketers. The FCA is clear on its ambition; all customers should be treated fairly.
Most marketers will claim that their approach to marketing is inclusive, however, the publication of this guidance suggests that, as it stands, the industry is falling short and failing to protect the vulnerable among us.
At a practical level, firms and marketing teams will need to increase the scope of their customer research, putting in place mechanisms to identify vulnerabilities. Firms will also have to go above and beyond in taking care of their customers, from producing concise copy to designing accessible products and services.
